I was a live-out nanny for years and a live-in nanny for one summer. My live-in experience was beyond terrible, so I can tell you what not to do, lol.
1) Meet with the nanny first and then email her the rates and hours you've agreed on so there is digital confirmation/paper trail before she starts. This is to protect both of you. I was told a certain rate and hours when I met the mom, then when I arrived (in another country!) she cut the money and upped the hours and said I had misheard. It was awful.
2) A nanny needs a reasonable work week like anyone else. If she wants just 4 half days instead of 2 full days off you can work that out, but start by assuming she wants free time, not that she wants to be with your kids all day. Write her days on and off down on a big calendar for everyone to see, and make sure she has what she needs to get out an enjoy her days off (metro card, cash, etc.). I watched these kids from the moment I got off the plane for a week straight before the mom gave me so much as an evening off. She gave me 100$ and said "I'll call you a cab, you have fun!" My first paycheck was then 100$ short. Not ever ever ever okay. I then worked 2 more weeks without a single day off. It was pretty much slave labor.
2) This should be obvious, but if the parents aren't home the nanny IS working! The mom I worked for wanted to pay me only until her children went to bed, even if she or her husband didn't get home until midnight!
3) Give her a real room with real privacy. The room I was given had a closet filled with the mom's clothing and a dresser half-filled with old baby clothes. They also didn't provide any internet or phone service for me. Before I arrived the mom said they'd have a phone available, but she neglected to get a plan to cover my calls from Canada to the USA. I called my boyfriend (now my husband) every night to say goodnight, and always asked her permission first. The next month she docked my pay 300$ for the "outrageous" phone charges. Oh, and one weekend her friends came to visit and they were given my room and I was sent to sleep on the living room couch. They then had loud drunken sex in my room.
4) Food does not equal pay. This mom once sent me to the grocery store with her children and a huge shopping list. When I went to checkout her credit card was declined. The kids were already eating candy from the cart, so I paid with my card and then gave her the receipt and told her what happened. She became irate and said I should have just "paid the bill myself since I eat more than any of them." I weighed 115 pounds at the time, soo... yeah. Oh and she used to cook a different meal for me to eat. Example: BBQ with her family was steak for her, her husband and their family and hot dogs for the kids and me. I was always offered a hot dog, never steak. It was just degrading.
5) She is signing up to watch your kids. Not their friends, and not your friend's kids. This mom took me to a "party" one time where there were 5 other children belonging to her various friends. I was sent to the play room and had to watch all 7 kids while the parents ate and got drunk. I even overheard one of the other mom's say "Wow, thanks for bringing her, now we can enjoy ourselves!"
6) Teach your children to respect the nanny. She is not their servant. My first night watching their 4 year-old I told him we would read 3 stories then go to bed. After 3 he said he wanted to read one more, but I said no, we said 3 and we read 3. He responded, "If you don't read me another story I'll tell my mommy you hit me and you'll go to jail." Yeeeahhh, should have been a big red flag. I told the mom and she brushed it off with a "yes he's very creative."
7) And finally, and this is a big one, actually pay her! I was sending all my checks back to the states to be deposited by a friend. Because I had no internet I couldn't go to my bank website and find out until 2 months in that every check I sent was bouncing! I found out from other nannies in the neighborhood (very rich part of Toronto) that this mom was a nanny user. She hired young girls like me from abroad, had us work illegally, then didn't pay us. We had no legal recourse. The only reason I got paid anything in the end was I caught her husband while she was at the spa one weekend and told him everything. His response was to sigh, take out his checkbook and say "ugh, not again."

So don't worry, I don't think you could possibly be worse than these people!

My experiences as a live in can't compare. However, I do remember when my boss kindly told me to immediately dispose of each individual feminine pad into the outside garbage instead of putting it in the bathroom garbage. I was mortified. Fortunately (really it was) I was let go after his darling angel of a child (cough cough) drew all over the wall when I thought he was napping. Little sneak!